Setup a Dutch Joint Venture
Collaborations between companies are common in the Netherlands and the rest of the world, with the Dutch joint venture being an ideal option as a form of cooperation.
In this blog, I look at the reasons for working together and the legal way in which collaboration in a Dutch joint venture may be shaped.
In a Dutch joint venture, two or more companies decide to work together, setting up a new company in the process. The participating companies become joint owners of the new Dutch joint venture and share both the profits and any losses. With collaboration in this form, the original companies retain their independence and can continue to operate independently of each other. Another feature is that none of the companies has a majority stake, which means that they are completely equal on paper.
In many cases, a Dutch joint venture is set up:
- In order to enter a new market;
- To obtain purchasing benefits;
- Combine knowledge and/or techniques;
- Achieve economies of scale;
- Finance the expansion of your business.
A Dutch joint venture is a perfect solution when companies wish to jointly develop a product or service, or if a company wants to supply its product abroad. By setting up a new company together with a Dutch partner or other European countries, you can get started quickly thanks to the existing local knowledge of the market. The Netherlands is by far the best country to establish a Dutch joint venture, with the nation has become one of the world leaders in the business climate for companies. The service sector is large and of high quality, and the Netherlands also has a great diversity of established companies in various sectors, such as agri-food, life sciences, the chemical industry, electronics, water technology, engineering, and much more.
The joint venture may be permanent in nature. Consider, for example, the strategic partnership of Douwe Egberts and Philips, who have jointly launched Senseo. However, it is also regularly used for temporary projects, for example when a railway tunnel has to be built. As soon as the project is completed, the joint venture will cease again. It can also be worth looking at setting up a joint venture if the new activity involves certain risks. Hence, by working with multiple parties, the risks are spread across all participants.
In addition, the form of cooperation can come about when a company wants to supply its product abroad and sets up a new company with a local partner for this purpose. Some countries even require foreign companies wishing to enter their market to do so through a joint venture with a local company. The Dutch player, for example, then supplies know-how and technology, while the foreign party provides market knowledge and the necessary distribution channels.
We can help you determine the best possible joint venture structure from a fiscal and organizational viewpoint.
Are you interested in setting up a Dutch joint venture? If so, please don’t hesitate to contact us!
POSTED ON 10 DECEMBER 2020 BY DIEGO